The Zacks Analyst Blog Highlights Costco Wholesale, Ross Stores, Target and Dollar General

For Immediate ReleaseChicago, IL – September 24, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Costco Wholesale Corp. COST, Ross Stores, Inc. ROST, Target Corp. TGT and Dollar General Corp. DG.Here are highlights from Tuesday’s Analyst Blog:Costco Q4 Earnings Preview: Is Now the Right Time to Buy the Stock?As Costco Wholesale Corp. prepares to unveil its fourth-quarter fiscal 2025 earnings results on Sept. 25, after the market closes, investors face an important decision: Should they buy the stock now or hold their current positions? With earnings expectations and market conditions in mind, it is crucial to evaluate key factors influencing Costco’s performance and whether the stock offers an attractive entry point ahead of its earnings report.Costco's strategic investments, customer-centric approach, merchandise initiatives and focus on membership growth have enabled it to navigate the market. These strengths have resulted in decent sales and earnings growth, positioning COST as a resilient consumer defensive stock.Analysts are optimistic about Costco's upcoming earnings. The Zacks Consensus Estimate for fourth-quarter revenues stands at $86.23 billion, representing an 8.2% increase from the prior-year reported figure. On the earnings front, the consensus estimate has improved by three cents to $5.82 per share over the past seven days, implying a 13% year-over-year increase.Costco has a trailing four-quarter earnings surprise of 0.4%, on average. In the last reported quarter, this Issaquah, WA-based company beat the Zacks Consensus Estimate by a margin of 0.7%.What the Zacks Model Predicts for COST’s Q4 EarningsAs investors prepare for Costco's fourth-quarter announcement, the question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Costco this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.Costco has a Zacks Rank #3 but an Earnings ESP of -0.74%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation QuoteCostco: Key Factors at PlayCostco’s growth strategies, competitive pricing and membership-driven business model have been instrumental in its sustained success. By offering products at discounted rates, the company appeals to shoppers seeking value and convenience. The company's bulk purchasing power and efficient inventory management allow it to keep prices low. This disciplined pricing mechanism helps Costco maintain steady store traffic and robust sales volumes. These factors are expected to have a favorable impact on the overall results.Costco, in its latest August sales report, highlighted that net sales for the 16-week fourth quarter reached $84.4 billion, reflecting an 8% increase from $78.2 billion last year. This growth was supported by strong comparable sales gains across regions and a notable contribution from e-commerce channels. Comparable sales for the quarter rose 5.7%, reflecting a 5.1% gain in the United States, a 6.3% increase in Canada and a solid 8.6% rise in other international markets.Furthermore, high membership renewal rates, often surpassing 90%, reflect Costco’s strong customer loyalty and provide a dependable revenue source. Membership fees contribute a steady income stream, regardless of broader economic fluctuations. We expect membership fees to increase 10.5% during the quarter under review.Costco continuously evolves to meet shifting market demands, regularly updating its product portfolio to include everyday necessities and unique, high-demand items. This adaptability has fueled Costco's domestic and international expansion, marked by the steady opening of new warehouse locations and the growth of e-commerce platforms in markets such as the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia. E-commerce comparable sales jumped 13.6% during the fourth quarter.With a clear emphasis on delivering value-oriented offerings, Costco remains well-positioned for continued success in the dynamic retail landscape. However, it is essential to acknowledge the presence of certain headwinds, including underlying inflationary pressures, which may pose challenges. Moreover, margins remain a critical area to monitor, with potential concerns stemming from any deleverage in the SG&A rate. We expect SG&A expenses to increase 6.8% year over year.Costco Stock PerformanceCostco shares have advanced 4.6% over the past year, surpassing the industry’s 3.9% gain. The stock has outperformed peers such as Ross Stores, Inc. and Target Corp., although it has lagged behind Dollar General Corp.Shares of Ross Stores and Target have dropped 5% and 44.6%, respectively, while Dollar General stock has gained 19.8% over the same period.Does Costco Tick the Boxes for Value Investing?From a valuation standpoint, Costco currently trades at a premium relative to its industry peers. The company’s forward 12-month price-to-earnings (P/E) ratio is 47.13, higher than the industry average of 30.13 and the S&P 500’s 23.52. However, the stock is also trading below its median P/E level of 50.61, observed over the past year. This valuation suggests that while Costco trades below its historical peak, investors are paying a premium relative to the company’s anticipated earnings growth.Costco is trading at a premium to Target (with a forward 12-month P/E ratio of 10.93), Ross Stores (21.84) and Dollar General (15.82).Costco Stock: Buy, Hold or Sell Ahead of Q4 Earnings?Costco’s business model, built on strong customer loyalty and competitive pricing, positions the company well for continued success. However, its premium valuation, along with the Zacks model not conclusively predicting an earnings beat, calls for a cautious approach. For now, holding existing positions seems prudent, while new investors may want to wait for the earnings release for a clearer picture before committing fresh capital.Free: Instant Access to Zacks' Market-Crushing StrategiesSince 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.Get all the details here >>Zacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Target Corporation (TGT): Free Stock Analysis Report Dollar General Corporation (DG): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Ross Stores, Inc. (ROST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks